Q&A

Question 1

BS definition

Answer 1

BS is a financial statement that reports a company’s assets, liabilities and the shareholders’ equity at a specific point of time.
it provides the basis for calculating RATES OF RETURN and evaluating CAPITAL STRUCTURE.
Provides a SNAPSHOT of what a company owns and owes as well as the amount invested by shareholders.

Question 2

Most common ratios of a BS

Answer 2

Days sales Outstanding (=Avg. AR / Net Credit Sales *365)
D/E ratio
Inventory turnover (=COGS/Avg. Inventory)
WC turnover ratio (=Net Annual Sales / Avg. WC)

Question 3

Controller is responsible for supervising the Budgeting process. what are the steps of the planning process?

Answer 3

• Sales Planning
• Sourcing and production related costs
• personal expenses
• Administrative expenses
• Other operating expenses
• Capital expenditure / depreciation
• Financial result (interest income/ interest expenses)
• Taxes

Question 4

!! Controlling covers almost the whole organisation. What kind of performance analysis are you aware of?

Answer 4

Dimensions of Controlling:

• Actual VS budget
• Variance analysis (difference between actual and planned behavior)
• Definition of actions to be taken

Direct observation
Data gathering
Discussion
Active listening
Thoughtful questioning

Question 5

Main parameter of the company valuation?

Answer 5

1. Asset-based approach(TA-TL)
2. Earnings-based approach = Multiples (avg. Earnings times a multiple)
3. Market Value Approach = Comparable companies

Question 6

A part of professional cash-management is the WC management. describe the WC ratio

Answer 6

Total Current Assets / Total Current Liabilities.

Indicates which part of the short-term liabilities might be financed through the current assets

One of the key indicators of the BS analysis.

Question 7

What focus should a long-term vision have?

Answer 7

A Vision statement focuses on tomorrow and what an organization wants to ultimately become. The Vision statement gives the company direction, it is the future of the company

Question 8

Which are the most impo questions a succesful Business Plan should answer to its readers?

Answer 8

What is the business idea?
Who are the existing and potential customers?
Who are the competitors of the business?
Is the management capable of running the business successfully?
What is the long term future of the business?
What is the company`s financial picture?

A Business Plan is a powerful document telling the story of a company; it presents the current position, the vision for the future and the plan for realizing that vision. A business plan defines a certain activity over a specific period of time.

Question 9

What are the 9 steps of the Business Plan?

Answer 9

1. Executive Summary
2. Description of the company
3. Target Market
4. Competitive Analysis
5. Marketing and Sales Strategy
6. Operations Plan
7. Management
8. Future Development/Exit Strategy
9. Financials

Question 10

Is the market share of any importance of the success of the company?

Answer 10

Market Share is one of the relevant KPIs for the Strategic controlling -> business strategy and the future development (mid-to-long-term perspective)

Question 11

For what purposes is it crucial to develop a business plan?

Answer 11

A Business Plan is a powerful document telling the story of a company; it presents the current position, the vision for the future and the plan for realizing that vision. A business plan defines a certain activity over a specific period of time.

A Business Plan is a necessary tool for every business
Without a Business Plan, banks or investors will not entertain the thought of financing a business

Question 12

Which questions should be answered to the readers of the executive summary?

Answer 12

When completed, these questions should be answered:
Does the business concept make sense?
Has the business been correctly planned?
Is the management team capable?
Is there a market need for the products/services offered?
What advantage does the company have over the competitors?
Are the financial projections realistic?
Is the business likely to succeed?
Will investors make money?
Will lenders be able to get their money back?

Question 13

controller anticipates future developmetn of the business. How can this projection be realised?

Answer 13

He goes around company and asks questions + he can compare the budget with the performance, see trends, and in that way.

Question 14

What are the Key indicators of the income statement?

Answer 14

Gross profit margin (Sales less COGS)
EBITDA margin (EBITDA to Sales)
EBIT margin (EBIT to Sales)
Earnings per share (net income/total shares)
Dividends per share (dividend payed out/total shares)
ROS (net income/sales)
ROE (net income/shareholders equity)
ROI (net income/total assets)

Question 15

What is the content of a budget?

Answer 15

The budget contains:
Startegic goals
Operational targets
Action plans for:
- Sales 
- Sourcing and procurement
- Human resources
- CapEx
Company‘s financing

Question 16

Deinition of profit.

Answer 16

(result of Earnings-expences)

Question 17

Share deal VS asset deal

Answer 17

With a share deal the purchaser acquires the company by buying all or almost all of the shares of a partnership or corporation. In the case of the asset deal he buys the assets of the company and has the individual assets transferred such as production lines, real estate, buildings, facilities, inventory and patents and all contracts and liabilities of the company.

In the case of a share deal the company liabilities are passed on to the purchaser. The assets and liabilities of the company which is taken over remain unchanged. If the company which is taken over is in an economic crisis or is in danger of becoming insolvent, the purchaser is obliged if necessary to file for insolvency proceedings. This makes the share deal less attractive in a crisis.